Brands Take A Stand For Quality In The Wild West Of Digital Advertising

Tim Cadogan, CEO at OpenX Technologies Inc.BLOOMBERG NEWS

The world of digital advertising has been full of drama and intrigue over the past couple of years. Reports alleging fraud and kickbacks in a murky value chain. Concerns over brand safety and viewability. Looming—and potentially inconsistent—regulatory frameworks. And most recently an FBI inquiry that ANA’s general counsel called “very serious”.

Amidst all the turmoil, industry players have been taking a stand to impose quality and re-build confidence in the digital ecosystem. Mega-advertisers like P&G, Unilever and Chase have demanded reform and backed up their words with their budgets. For their part, a few key players on the media and tech side of the table have been stepping up with joint initiatives and commitments of their own to address quality issues.

One of them is Tim Cadogan, co-founder and CEO of OpenX, the world’s largest independent ad exchange and supply-side platform (SSP). Tim comes to the digital quality dilemma having spent a decade immersed in the growth of search advertising where he confronted issues such as click fraud as SVP of Global Advertising Marketplaces at Yahoo! Today his company is seen as a leader helping to shape the global conversation around quality, standards and transparent practices in digital advertising.

Peter Horst: Taking a big picture view, what are the key developments in the world of digital and programmatic that marketers need to embrace?

Tim Cadogan: Media fragmentation has massively impacted the way practically every single brand and marketer must think about advertising today. Rather than sitting on a couch and watching traditional TV for hours at a time, people are constantly shifting their attention across a variety of channels. Consider for example that 40% of millennials watch zero live broadcast TV and you begin to understand the new landscape. This shift has made it that much more difficult for an advertiser to reach their target consumer. So there is a need for brands to adjust their understanding of consumers and develop the right media mix strategy to reach and engage where they are now spending the majority of their time – online and on mobile devices.

More attention also needs to be paid to not only where to reach consumers but how to actually engage with them. A lot of advertising today is simply not engaging, and as a result, consumers are tuning out ads altogether. But the positive news is that most consumers claim they are not bothered by ads when they are relevant. Consumers are sending a clear message to marketers: deliver relevant advertising.

Horst: The industry has been focused on ad quality and brand safety for a while now—how much progress has been made?

Cadogan: A lot of progress has been made over recent years, which can be attributed to both emerging standards from trade groups like the IAB or Trustworthy Accountability Group (TAG), as well as the companies that have made significant investments in quality-focused technology and strict enforcement policies for these new standards. To quantify what companies committed to quality are doing, we have invested over $100 million in quality measures over the last few years, including $25M in 2018.

Beyond the traditional elements of ad quality and brand safety, there’s also a layer of transparency to consider in preserving the overall quality of the ecosystem. Many of the quality issues in recent years have stemmed from a lack of transparency into the mechanics of the auctions powering the programmatic industry, where advertisers and publishers did not know what was happening.

Horst: What should marketers do to ensure that their money is going where they want it to, and generating the results they seek?

Cadogan: There are a few clear things that all marketers can do: The first is to take more control over their advertising supply chain. Brand marketers should know every single party that touches a piece of their campaign. The second is to align around standards. Initiatives like the IAB’s ads.txt program have almost single handedly eliminated one kind of threat known as domain spoofing. Other programs, like certification from TAG, have been shown to cut ad fraud by more than 80%. In the past few weeks alone, a new set of standards, the programmatic principles, came out in an open letter signed by the CEOs of a group of leading exchanges. Ad quality’s momentum is building as the major players continue to raise the bar.

Finally, to ensure they are generating actual results, it’s important that marketers have an understanding of the new media landscape, with so many consumers cutting the cord of traditional TV and spending so much time on mobile. This is a big opportunity for marketers, as long as they are willing to embrace a changing advertising landscape.

Horst: What has OpenX been doing to address these issues?

Cadogan: At OpenX, there are two key areas that we are really focused on. The first of course is quality. For the programmatic ecosystem to meet its full potential, we need to deliver both quality and transparency so that brands can trust their investment in the system. Our quality team alone is comprised of more than 30 individuals.

The next area is in innovation and engineering. Half of our global workforce focus on innovating new products and engineering the best marketplace for buyers and sellers. In-app advertising is growing at a rapid pace and for us that has meant completely reengineering our platform from a traditional desktop market to now being a majority mobile company. We’re now seeing similar growth patterns across video and expect Connected TV/OTT to follow. The ability to be nimble and adapt to market changes quickly has allowed us to successfully help marketers solve fragmentation challenges as consumers continue to disperse their time and attention across channels and formats.

Horst: What new issues do you see looming in the future as digital marketing continues to evolve?

Cadogan: The issue looming in the future is actually the same one we are facing today: trust. A lack of trust in the ecosystem has led to regulations like GDPR and caused brands to take a very hard look at every single partner they work with. This trend isn’t going away, and we need to be thinking about building trust from advertisers, building trust from consumers, and just generally ensuring that all players in the programmatic ecosystem feel comfortable with the way in which our industry operates.

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Peter leverages his decades of experience in building businesses across diverse industries to provide advisory services to senior executives and their teams through his consultancy CMO Inc. He consults in the areas of brand strategy, positioning, marketing plan development, innovation, marketing organizational strategy, and campaign development.

Routinely one of the highest-rated keynoters at conferences around the world, Peter brings humor, authenticity, and compelling content to his engagements. Peter is equally comfortable speaking to international CMO forums, technology conferences, and in-house corporate events.